2. Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cost. If an amount is zero, enter "0". Allocation Ratios Machine hours Square footage Power General Factory Pottery Retail Cost Allocations Power General Factory Pottery Retail Direct costs General Factory Power Cost after allocation Support Departments Operating Divisions General Factory Pottery Retail $160,000 $98,000 $56,000 1,000 6,900 3,100 1,700 4,000 6,000 Power Overhead costs $150,000 Machine hours Square footage 2,000 2,000 Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar. Required: 1. Allocate the support service costs using the direct method. Allocation Ratios Pottery Retail Proportion of machine hours 0.5308 X 0.2385 X Proportion of square footage 0.2912 X 0.4372 X Cost Allocations Pottery Retail Power 79,620 X 35,775 X General Factory 46,592 X 69,952 X Direct costs 98,000 ✔ 56,000 224,212 X $ 161,727 X

2. Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cost. If an amount is zero, enter "0". Allocation Ratios Machine hours Square footage Power General Factory Pottery Retail Cost Allocations Power General Factory Pottery Retail Direct costs General Factory Power Cost after allocation Support Departments Operating Divisions General Factory Pottery Retail $160,000 $98,000 $56,000 1,000 6,900 3,100 1,700 4,000 6,000 Power Overhead costs $150,000 Machine hours Square footage 2,000 2,000 Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar. Required: 1. Allocate the support service costs using the direct method. Allocation Ratios Pottery Retail Proportion of machine hours 0.5308 X 0.2385 X Proportion of square footage 0.2912 X 0.4372 X Cost Allocations Pottery Retail Power 79,620 X 35,775 X General Factory 46,592 X 69,952 X Direct costs 98,000 ✔ 56,000 224,212 X $ 161,727 X

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 24E: Refer to the data in Exercise 7.22. The support departments are ranked in order of highest cost to...

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Refer to Cornerstone Exercise 7.3. Now assume that Valron Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. (Round all allocated costs to the nearest dollar.) 3. What if the allocation ratios in Requirement 1 were rounded to six significant digits rather than four? How would that affect any rounding error in the allocation of costs?
Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating support service costs by switching to the direct method. Required: 1. Allocate the costs of the support departments to the producing departments using the direct method. (Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar.) 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.)
Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the total cost in P1 and P2 after allocation using the direct method?
The following information is departmental cost allocation with two service departments and two production departments. Department Cost Percentage Service Provided to S1 S2 P1 P2 Service 1 (S1) $ 32,000 0% 25% 30% 45% Service 2 (S2) 23,000 20 0 20 60 Production 1 (P1) 130,000 Production 2 (P2) 180,000 What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first? The following information relates to a joint production process for three products, with a total joint production cost of $165,000. There are no separable processing costs for any of the three products. Product Sales Value at Split-Off Units at Split-Off 1 $ 181,500 320 2 99,000 960 3 49,500 1,920 $ 330,000 3,200 What percentage of joint cost is allocated to each of the three products using the sales value at split-off method? Do not give answer in image
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Required information [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Department Service 1 (S1) Service 2 (S2) Production 1 (P1) Production 2 (P2) Cost $ 47,000 37,000 270,000 320,000 Service Department Cost Allocation Total Cost Percentage Service Provided to P1 S1 0% 20 S2 20% 0 What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first? P1 40% 20 P2 P2 40% 60
Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments HumanResources GeneralFactory Fabricating Assembly Direct costs $165,000 $380,000 $114,200 $90,000 Normal activity: Number of employees — 40 70 150 Square footage 1,800 — 5,500 13,200 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded…
Required information [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Department Service 1 (S1) Service 2 (S2) Production 1 (P1) Production 2 (P2) Cost $ 47,000 37,000 270,000 320,000 Percentage Service Provided to S1 0% 20 S2 P1 20% 40% 20 0 P2 40% 60 What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $270,000 to $290,000?
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6) 16% -Given the following data for operation departments A and B, prepare a schedule using the direct and step method of allocation to allocate service department costs to the operating departments and show total cost for department A and B. Department Costs # of Employees Square Feet Operating Dept A $1600 80 200 Operating Dept B $1300 120 300 Maintenance $3,000 100 100 Payroll $4,000 100 100 For the step method, begin with the maintenance department.
Allocate the service cost using the Direct method.
Motorcade Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate to Motorcade's allocation of service department costs: Round to two decimal places. Budgeted Costs Nbr of Employees S1 $3,120,000 75 S2 2,320,000 50 S3 1,000,000 25 P1 150 P2 225 Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs Calculate the total service department cost allocated to production department P1